[Federal Register Volume 67, Number 210 (Wednesday, October 30, 2002)]
[Notices]
[Pages 66114-66115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27629]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-427-815]


Stainless Steel Sheet and Strip in Coils from France: Notice of 
Court Decision and Suspension of Liquidation

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On September 24, 2002, in Allegheny Ludlum Corp. v. United 
States, Consol. Court No. 99-09-00566, Slip Op. 02-114, a lawsuit 
challenging the Department of Commerce's (``the Department's'') Final 
Affirmative Countervailing Duty Determination: Stainless Steel Sheet 
and Strip in Coils from France, 64 FR 30774 (June 8, 1999) (``French 
Stainless''), the Court of International Trade (``CIT'') affirmed the 
Department's second remand redetermination and entered a judgment 
order. In this redetermination, the Department reviewed the record 
evidence regarding the facts and circumstances of the privatization of 
Usinor, Ugine S.A., and Uginox Sales Corporation (collectively 
``Usinor''), including the terms of the sale, and concluded that Usinor 
received no countervailable subsidies as a result of the privatization 
transaction.
    As a result of the redetermination, the countervailable subsidy 
rate for the subject merchandise produced and sold by Usinor during the 
period of investigation (``POI'') was reduced from 5.38 percent to 0.00 
percent ad valorem.
    This redetermination was not in harmony with the Department's 
original final determination in French Stainless. Consistent with the 
decision of the U.S. Court of Appeals for the Federal Circuit 
(``CAFC'') in Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 
1990) (``Timken''), the Department will continue to order the 
suspension of liquidation of the subject merchandise until there is a 
``conclusive'' decision in this case. If the case is not appealed, or 
if it is affirmed on appeal, the Department will instruct the U.S. 
Customs Service to terminate the suspension of liquidation for all 
entries of stainless steel sheet and strip in coils from France.

EFFECTIVE DATE: October 30, 2002.

FOR FURTHER INFORMATION CONTACT: Jesse Cortes, AD/CVD Enforcement Group 
I, Office 1, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, DC 20230; telephone: (202) 482-3986.

SUPPLEMENTARY INFORMATION:

Background

    In French Stainless, using the change-in-ownership methodology in 
place at that time, the Department determined that countervailable 
subsidies were being provided to producers and exporters of stainless 
steel sheet and strip in coils from France. Usinor challenged this 
determination before the CIT.
    On February 2, 2000, the CAFC ruled in Delverde SRL v. United 
States, 202 F.3d 1360 (Fed. Cir. 2000), reh'g granted in part, (June 
20, 2000) (``Delverde III''), that:
 the Tariff Act as amended does not allow Commerce to presume 
conclusively, pursuant to a per se rule, that the subsidies granted to 
the former owner of Delverde's corporate assets automatically 'passed 
through' to Delverde following the sale. Rather, the Tariff Act 
requires that Commerce make such a determination by examining the 
particular facts and circumstances of the sale and determining whether 
Delverde directly or indirectly received both a financial contribution 
and benefit from the government.
    202 F.3d at 1364. The methodology analyzing Delverde's change in 
ownership and struck down by the CAFC in Delverde III was similar to 
that employed in French Stainless. Accordingly, the Department asked 
the CIT to remand the French Stainless proceeding for reconsideration 
in light of Delverde III. The parties consented to this remand.
    On August 15, 2000, the CIT remanded the French Stainless 
proceeding to the Department with instructions to issue a determination 
consistent with United States law, interpreted pursuant to all relevant 
authority, including the CAFC decision in Delverde III. Allegheny 
Ludlum Corp., et al v. United States, Court No. 99-09-00566, Remand 
Order dated August 15, 2000.
    On December 20, 2000, following a comment period, the Department 
issued the Final Results of Redetermination Pursuant to Court Remand. 
In that redetermination, in light of Delverde III, the Department 
analyzed the facts and circumstances of Usinor's privatization 
transaction to determine whether the person to whom countervailable 
subsidies had been given in the past was essentially the same person 
after privatization. Among the facts and circumstances considered, the 
Department examined the continuity of general business operations, the 
continuity of production facilities, continuity of assets and 
liabilities, and retention of personnel before and after the 
privatization. Based on these factors, the Department determined that 
post-privatization Usinor was essentially the same person as pre-
privatization Usinor. Consequently, the pre-privatization subsidies 
remained attributable to Usinor following its privatization.
    After briefing and a hearing, the CIT, on January 4, 2002\1\, again 
remanded the French Stainless proceeding to the Department. Allegheny 
Ludlum Corp. v. United States, 182 F. Supp. 2d 1357 (CIT 2002). The 
court explained that the central question was whether the Department's 
remand redetermination was consistent with the statute, as interpreted 
by the CAFC in Delverde III. The court found that Delverde III's 
requirements were as follows:
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    \1\ The Court[quot]s Memorandum Opinion and Order is dated 
January 4, 2002, however, the order establishing the time frame for 
the remand is dated January 7, 2002.
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1. Section 1677(5) prohibits the Department from adopting any per se 
rule that a subsidy passes through, or is eliminated, as a result of a 
change in ownership. Id. at 1377.
2. The statute requires that the Department must look at the facts and 
circumstances of the entire transaction, including the terms of the 
sale, to determine if the purchaser/new owner received, directly or 
indirectly, a subsidy for which it did not pay adequate compensation. 
In other words, the Department must find that the purchaser/new owner 
indirectly received a subsidy from the government. Id. at 1377-1380.
    The Court specifically rejected, as contrary to Delverde III, the 
Department's argument that, if the pre- and post-privatization 
companies are, in substance, the same legal person, the Department is 
not required to determine anew whether that same person has received a 
subsidy.
    On June 3, 2002, following a comment period, the Department issued 
its Results of Redetermination Pursuant to Court Remand. In this second 
redetermination, the Department re-analyzed certain facts and 
circumstances of the privatization of Usinor, including the terms of 
the sale. The Department determined that: 1)

[[Page 66115]]

some purchasers of Usinor's shares paid full, fair-market value for 
those shares and, thus, received no subsidy from the privatization 
transaction; and 2) other purchasers that did not pay full, fair-market 
value did receive a subsidy from the privatization transaction. 
However, regarding the purchasers that did not pay full, fair-market 
value, while they did receive a subsidy, the Department determined that 
this subsidy was not countervailable because it was conferred on the 
owners of the company, and not on the company itself. Consequently, the 
Department concluded that Usinor received no countervailable subsidies 
as a result of the privatization transaction, and recalculated a 
subsidy rate of 0.00 percent ad valorem for Usinor for the POI.
    The CIT affirmed the Results of Redetermination Pursuant to Court 
Remand on September 24, 2002. See Allegheny Ludlum Corp., et al. v. 
United States, Consol. Court No. 99-09-00566, Slip. Op. 02-114 (CIT 
2002).

Suspension of Liquidation

    The CAFC, in Timken, held that the Department must publish notice 
of a decision of the CIT or the CAFC which is not ``in harmony'' with 
the Department's final determination. Publication of this notice 
fulfills that obligation. The CAFC also held that the Department must 
suspend liquidation of the subject merchandise until there is a 
``conclusive'' decision in the case. Therefore, pursuant to Timken, the 
Department must continue to suspend liquidation pending the expiration 
of the period to appeal the CIT's September 24, 2002, decision or, if 
that decision is appealed, pending a final decision by the CAFC. The 
Department will instruct the Customs Service to liquidate relevant 
entries covering the subject merchandise effective October 30, 2002, in 
the event that the CIT's ruling is not appealed, or if appealed and 
upheld by the CAFC.

    Dated: October 23, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-27629 Filed 10-29-02; 8:45 am]
BILLING CODE 3510-DS-S